Background: Type 2 diabetes mellitus (T2DM) is a condition characterized by insulin resistance and progressive failure of the insulin-secreting beta-cells. Previously considered a disease of adults, it is now becoming increasingly prevalent in children and adolescents. Patients with childhood onset T2DM are at very high risk for diabetes-related morbidity and mortality, due to a longer life-time duration of diabetes, as well as possible increased rapidity of beta-cell failure. In part, the impairment in insulin secretion in T2DM is caused by beta-cell exhaustion due to a constant, unsuccessful attempt to compensate for the existing insulin resistance. In addition, beta-cell function is affected by glucotoxicity, generating a downward cycle of hyperglycemia leading to decreased insulin secretion, which further worsens hyperglycemia. Results from two recent studies in adults with newly diagnosed T2DM suggest that intensive insulin treatment for 2 weeks may break this cycle, resulting in significant, long-term improvement of beta-cell function. Both reports documented that approximately 50% of patients maintained euglycemia on diet alone at 12-month follow-up. The concept of beta-cell rest, or suppression of insulin release from beta-cells, was originally developed in the context of type 1 diabetes. It was then expanded into the field of T2DM and argues that decreased demand on beta-cells can lead to improvements in insulin secretion and beta-cell viability. Over the past 30 years, results of many in vitro, in vivo and clinical studies support this hypothesis. Study design: In this randomized, controlled trial we will divide adolescents and young adults with T2DM of up to 1 year duration into 2 treatment groups: Group 1 (control arm) will receive conventional therapy for T2DM (metformin plus diet and behavior modification). Group 2 will undergo beta-cell rest using continuous subcutaneous insulin infusion (CSII) and oral diazoxide therapy for a period of 2 weeks, in addition to conventional therapy (metformin plus diet and behavior modification). The study will last for one year, and patient participation consists of the following: a) 2 month run-in period with metformin, diet and exercise b) 2 week inpatient stay (at the beginning of this hospitalization, patients will be randomized to one of the two treatment arms c) Outpatient follow-up visits every 3 months for one year (metformin, diet and exercise will be continued throughout) The primary outcome will be comparison of insulin secretion (assessed at one year) in the beta-cell rest group versus the conventional group at the 12-month follow-up time point.